Over the past few weeks some big ideas have been pronounced dead before their time, and others have been rudely resuscitated. Regulation by the state, we are told, needs expanding, not minimising. Anglo-American capitalism is mistaken, said the Europeans, just before they bailed out their own banks. Nationalisation is acceptable again. Corporate salaries are not. Financial cleverness is too clever by half. And yet, in all this churning, one way in which our intuitions about policymaking must actually change has been missed: the Centre is back.

It would be difficult to understate what a shift this is. For decades, we have been accustomed to the thought that many of the problems bequeathed to us by mid-century statist philosophies arise from centralisation. Misallocation emerges from blindly imposing central plans based on out-of-date information, so decentralisation is close to a silver bullet, a one-size-fits-all solution that creates efficiency gains out of nowhere, something that works from corporate restructuring to road-building. What we know now is that that instinct was an over-reaction, and tempted us into dangerous over-simplification.

When Paul Krugman won his well-deserved Nobel prize in economics a few days ago, he had just finished and posted on The New York Times website his latest column: praising British Prime Minister Gordon Brown. Brown had announced a carefully planned underwriting of British banks — but also chose to make two major political moves that underline this shift. He pushed the EU into replicating his plan; and he pointed out that the Scottish Nationalists, political enemies of his, couldn’t use their provincial government to rescue the Royal Bank of Scotland and two other big banks. Simply put, the banks were under pressure not just from Edinburgh and Glasgow, but from London as well — and any plan to rescue them couldn’t be Scotland-centric. Devolution, the big idea of the past decade, might have worked for smaller issues, Brown implied, but bigger things needed the Kingdom to stay United.

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